Bitcoin Surpasses $118,000, Showing Potential for Further Growth
Bitcoin (BTC) achieved a new milestone on Friday, breaking the $118,000 mark for the first time. Despite this surge, indicators suggest that the market isn’t experiencing the typical Fear of Missing Out (FOMO) seen in previous bull runs, hinting at more potential price appreciation in the current market cycle.
Long-Term Holders Hesitant to Take Profits
Bitcoin briefly exceeded $118,000 after $1.18 billion in net inflows poured into U.S. spot Bitcoin exchange-traded funds (ETFs) on Thursday, according to data from SoSoValue. This influx, coupled with rising prices, has pushed the total net assets of these products above $141 billion.
Despite Bitcoin’s recent peak, on-chain indicators reveal that market optimism remains relatively subdued compared to past cycles. This suggests a more sustainable rally, less driven by pure speculation.
NUPL Indicator Suggests Room for Growth
The Net Unrealized Profit/Loss (NUPL) indicator for Long-Term Holders (LTH) currently sits at 0.69, slightly below the 0.75 threshold typically associated with euphoric market conditions, blockchain analytics firm Glassnode noted in a post. The current cycle has only seen 30 days above that level, compared to 228 days during previous bull markets.
This NUPL level indicates that while long-term holders are taking profits, they haven’t reached the extreme selling levels seen in previous price peaks. This suggests further growth is possible if LTHs continue to hold their positions.
Short-Term Holders Also Showing Restraint
Similarly, Short-Term Holders (STH) have resisted the urge to secure profits despite Bitcoin’s push to a new all-time high. The Realized Price of Short-Term Holders—used to track the average acquisition cost of coins held for less than 155 days—is currently around $100,000, according to a report from CryptoQuant.
Typically, with Bitcoin’s recent rally, STHs would be expected to take some profits. However, their reluctance to do so reflects a broader decision to hold, mirroring the behavior of LTHs. “The market does not show signs of being overheated with excessive selling from profitable short-term holders,” analyst CryptoMe wrote in the report.
Open Interest Surges, Funding Rates Remain Neutral
Analysts at CryptoQuant also highlighted the significant increase in Bitcoin’s open interest, which soared to $81.4 billion on Friday following BTC’s rise above its previous peak of $112,000. Despite this surge, funding rates have remained near neutral levels, indicating a low level of FOMO-driven activity among traders.
“This means that investors are not opening aggressive long positions using high leverage with FOMO,” the report states.
This restrained behavior suggests that despite Bitcoin’s ascent to new highs, market sentiment remains below the elevated levels seen in the run-up to the all-time highs of November and January, as the current uptrend is not yet driven by excessive speculation.
Bitcoin is currently trading near $117,400, up 1.3% in the last 24 hours.
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